The Lessons of Oregon's Vote to Tax the Rich (The Atlantic)

[highplainsdem]

http://business.theatlantic.com/2010/01/the_lessons_of_oregons_vote_to_tax_the_rich.php

Jan 27 2010, 11:06 am by Derek Thompson

The Lessons of Oregon's Vote to Tax the Rich


Oregon voters approved by a wide margin new taxes on wealthy families and corporations. For two decades, Oregon voters had mimicked California, freezing property taxes, rejecting sales taxes and demanding that any surpluses go back to the people in the form of rebates. No more! The two measures will raise income taxes for households making more than $250,000 a year and raise the state's corporate income tax.

Naturally, Washington will be looking for national implications of this vote -- especially since conservative pundits greeted the Massachusetts upset like a deus ex machina. I have two observations.

The first observation is that direct democracy is an incredibly poor way to run a state. Oregon and California's experiments in initiatives and referenda have done nothing more than reveal that their voters love services and hate taxes.

Imagine you're an Oregonian on the day of a sales tax referendum vote. You wake up, go downstairs and flip through your credit card bills while you brew the coffee. You wake up your kids, remember that you forgot to pay the tutors last month, and drive them to their fine, but admittedly mediocre public school. Then you pull onto the highway to head to work. The engine light turns on, dammit. You reach the office, toil through Excel for three hours (you really ought to be paid more for this, you remind yourself) and at noon you pass the Subway where you usually buy a cheap sandwich to save money to vote on the sales tax. You remember that there's a deep budget deficit and that something will to be done in a distant place called tomorrow. But tomorrow is tomorrow, and you need money for the credit cards, and the tutors, and the public school donations, and the engine, and the money you're not making on the job -- you need that money today. So you vote NO to all the tax increases and service cuts -- as you always have and almost always will.

I'm not saying this guy is wrong or stupid. I'm saying this guy is why we need representatives to make tough budget decisions for us.

The second observation is that I think this vote has nothing to do with Left or Right. It has to do with money and anger. With double-digit unemployment, eight-digit Wall Street bonuses and thirteen-digit federal deficits, Americans are feeling inundated with a lot of numbers that tell a simple story: America's workers have no money, America's coffers have no money, but America's rich people have a lot of money. Neither liberals nor conservatives have a monopoly on populism, and it seems to me that Obama needs to show America tonight that he feels the anger. If we're lucky, we might even see it. It's not entirely clear to me how the White House loses by taking on the banks more aggressively in the next few months to build back political mojo. Separate from whether or not it is good financial policy, a plan that says "I'm taxing the banks who created this mess and I'm funneling that money into jobs programs to help average Americans pay their mortgage" is pretty safe politics.

[jjray7]

1. class warfare

is implicitly about left and right. Derek Thompson is talking out of both sides of his mouth. If he is saying it is not about Dem or Repub, then cool. But this sort of vote breaks directly down class lines and has everything to do with the majority of lesser means (the left) taking back from the wealthy (the right) ... which does not trouble me in the least. Do some poor bubba's vote on the right for social reasons? Yeah but that fact does not change that the overwhelming majority of poor people in states like Oregon vote progressive. The issue is different in the south (due to race issues) but much cleaner in the north.

[sandnsea]

2. Not if you look at the vote on a map

If the Republican counties had their way, this would not have passed. As with most things in Oregon, Portland and Eugene put this over the top, and some of the northern coastal communities. The rest of the state is much poorer, and always votes Republican. And they did on this tax bill. Douglas County is a logging county, has somewhere around 15% unemployment, voted against this big time. They bought that they would lose more jobs and think it's fair that everybody pay the same amount. So here on the ground, it is still about left & right, and Dem & Repub, and not completely about class warfare.

[alstephenson]

3. Ah, yes, voting against their own interests again...

Never ceases to amaze me.

[femrap]

6. I guess the corporations have

fooled them into thinking that if the corp. pays its fair share, they will fire everyone.

Maybe these loggers are just plain stupid and gullible....and haven't read a book since high school.

Maybe someone needs to smack 'em upside the head and yell, 'Snap out of it.' (As Cher did in 'Moonstruck.') If there were a law against being stupid, they'd all be in jail. I tell this to anyone with a bumper sticker for Mcpalin. And it's amazing how long it takes them to finally get that I have insulted them.

We all have to find ways to have fun these days....this is one of mine.

[Generator]

21. It ends up sounding like blackmail

All the business sob's ever say is: "Oh if you pass this tax on me-I will have to take away your job."

If that isn't direct blackmail-threatening us over and over-I don't know what it.

I HAVE HAD it with their bullshit. Take the goddamn jobs away then, fuckers, then you make no money either. Go live in California and pay the fucking sunshine tax and the sales taxes. Then they threaten to leave-fine-leave-if you don't like Oregon-go away if you can't afford it. I hate that threatening crap.

Native Oregonian here.

I don't know why we can't blow the old bubble of this fantasy of the poor-that some day they too will be like Joe the Plumber and be wealthy.

Most of those that vote against taxes for the rich never even know anyone in their lifetime that makes over $250,000 a year-it's absurd that they think they are going to become just like them so they think they are voting for their future.

Also I still hate sales tax. I would vote to increase any other tax but that one. Once you have lived your entire life without one-you don't want it. It's always regressive and hurts the poorer the most. And I don't think that makes us anti-tax. There were some other taxes for schools and the zoo that passed in November 2008 at the height of the economic scare.

[femrap]

23. I'm in Ohio where there is a sales tax....

and they have been finding other 'services' to tax. We don't have a sales tax on food from a grocery store. But there's tax if you eat at a restaurant.

It's regressive...I agree.

I just want the rich to be taxed. Tax their income, their dividends, the whole enchilada. Shit, they're the only ones who have any money to pay their damn taxes. Selfish greedy creeps.

And if corporations are taxed at the federal level, they're all in the same boat....none of their competitors comes out ahead. Hell, there isn't even any competition anymore. Just Collusion among the those few who are left.

[HuckleB]

4. Exactly.

The counties that voted against this will reap a much higher percentage of the services that will remain intact compared to what they will pay.

[cascadiance]

7. It's both about class warfare and about being stupid vs. informed..

In Portland and Eugene, many could get more accurate information about what the bill REALLY meant as being beneficial to the average person, and billing those at the top more for a change. While those in the rest of the state had less access to a wealth of information that could let the know what it really meant to them to have these passed, and swallowed right wing talk radio pundit crap, as well as the corporate media propaganda of the likes of the Oregonian, and therefore swallowed this as a left wing vs. right wing thing, much like they swallowed the same sort of BS of the "Death Tax" which doesn't and can't affect 95% or more of Americans as it is at this time.

[sandnsea]

11. Really not true

The Coos Bay World endorsed a yes vote, iirc. The local school districts endorsed the bills. And the Oregonian opposed but didn't affect Portland at all. We got tons of ads that I'm assuming reached people all over the state, but maybe not. That would be interesting to know. They just think differently and working people are much more "beholden", for lack of a better word, to the business owners in their community. They believe these people when they say they're broke, and for reasons I don't understand, fail to notice the brand new $700 a month SUV. But that's how people in small towns vote and if you don't get in on the ground, you'll never change it.

[cascadiance]

12. There's really a lot of variables...

I'm guessing Ashland voted for it too. But I'm saying that those that sought to educate themselves about it, and not just listen to the propaganda, I would suggested helped vote this into law. In the parts of the state where it went down, I would suggest they had either less access to information that might keep them informed, or as you suggest are more "beholden" to the right wing spigots of information, who had depicted it as a right vs. left wing thing.

I do think that there might have been some resistance from very small business owners that aren't making a lot of money and feel nickled and dimed with many different taxes at the same level of taxation as larger businesses. My hair stylist said she voted no on 67 and yes on 66, since she basically has her own corporation and just works by herself out of her own house, and felt that the law should have been written a little better to not unfairly tax her. That's probably why 66 did slightly better in the polling than 67. I'm guessing there's a number of very small business people like that who in the future, we should figure out a creative way to give them back a break, and keep the newer taxes, etc. higher on larger businesses.

[sandnsea]

13. Well, you know, we passed a school levy last year

after it had failed twice during a much better economy. But don't listen to me on how to do anything. And go over to the Oregon forum and read from a business owner who voted no. And then remember how Mass just voted, and know that a chunk of that was voting against the premium tax. I just find it hysterical that we just spent two weeks on this board ranting against a tax, but we're supposed to turn right around and denegrate these red counties for voting against a tax. Oh, the difference is rich people and working people? Well not everybody sees the world that way. It's not propaganda, it's their belief system. They tend not to differentiate taxes between employer and worker. You have to figure out how to respect their views and make them believe we're all in this together. You'll never pit these people against their employers who they may well have gone to school with.

[cascadiance]

16. Ranting against what tax? The penalty for not having insurance?

That tax was ultimately to SUBSIDIZE corporate America. It was robbing Peter to pay Paul.

Yes, one of the big problems is that with all of the unininsured we now have, medical costs have soared, with hospitals, etc. having to pick up the tab on unpaid emergency visits. That was the motivation to put this in. But with no competitive public option and without adequate regulation on how insurance companies bill us for premiums and possibly can penalize those of us who are older with higher premiums, it is a problem when we have mandated taxes in effect for not paying for private insurance care to companies that are protected monopolies.

That really doesn't compare to increasing taxes on those that have been getting more of their taxes reduced from the Reagan era onward and have profited from that versus the middle and working classes that have been decimated and is on its last legs now. And Oregon shows that the sentiment is turning more against those who believe in the MYTH of "trickle down" economics, which is more like "trickle on" economics we've had for the last few decades that have gotten us into this mess.

This election was more about voting directly on issues rather than personalities and the other various variables that make it hard to assess what really lead Massachusetts voters to vote for Brown over Coakley. Obama and his advisors would be wise to look at what happened here before making too many bold statements tonight that might fly in the face of this election's results.

[sandnsea]

19. The premium tax

On the wealthy, which was spun to be a tax on working people. Look how fast Mass voters turned and forgot everything they ever knew about Democrats and Republicans. Over taxes, primarily. You just can't categorize voters in nice neat packages. They see their "best interest" in a variety of different ways.

Oregon passed a premium tax on all premiums, even though unions objected. That's because Democrats put kids and health care first. And it was fair, across the board on all working people.

There are a lot of lessons to be learned here and we shouldn't be too quick to pass it all off to propaganda, although fighting right wing propaganda is definitely part of the equation.

[WeCanWorkItOut]

24. I'm not sure that premiums have soared recently just because of the uninsured

A recent study by CHCF found that of the various
"Drivers of Spending Growth" 51 percent
came from simple increases in prices,
drugs, doctors, hospitals charging more.

I'm not saying that cost-shifting isn't part of it
but there are also things
like the increase in monopoly power that came with
the formation of the medical groups a while back.
But no one in the media wants to talk about that!

[HuckleB]

5. The discussion at The Atlantic (below this piece) is as ignorant as ever, I see.

Lots of people saying business and the wealthy will move because of this small measure. Ah, but Oregon actually does not have restrictive taxes. That is a perception that does not match reality.

In the '90s, I worked for a business publication company, and I had to read most of the nation's business magazines. For several years, Oregon's businesses rated it as being very business friendly, especially for small businesses, and Portland was singled out as being a great for a small business. Then the PBA decided they wanted an even better deal, and they began pushing propaganda about how Portland was not business friendly. Despite no tax increases and no policy changes, suddenly those magazines were no longer rating Portland and Oregon as business friendly, largely because the businesses had motive to change perception. Propaganda is successful, but, at least in this case, it's BS.

Some actual data can be found here where Oregon is rated as the 14th "best" state for business tax climate:... See More

http://www.taxfoundation.org/research/topic/52.html

This five-year-old study also shows Oregon's business tax burden as being very low:

http://www.ocpp.org/cgi-bin/display.cgi?page=issue040123

And another piece on the matter:

http://www.blueoregon.com/2009/03/oregon-business-taxes-were-number-2-lowest.html

And one more:

http://blog.oregonlive.com/mapesonpolitics/2008/08/oregon_state_and_local_tax_bur.html

I say it's time to drop the propaganda of the campaign, and look at the reality of the situation. The following piece does a mildly fair job of doing just that.

http://www.oregonlive.com/opinion/index.ssf/2010/01/measures_66_and_67_weighing_th.html

[cascadiance]

9. Those paying $140 more will grumble, but they won't move over that amount...

That would be stupid and more expensive. And ultimately if more states follow Oregon's lead and start doing this sort of thing, they won't have any place to go.

[HuckleB]

14. Well, if they moved to WA or CA, they'd still be paying far more.

So, where are they going to go?

[cascadiance]

25. And businesses have to keep in mind that sales tax is an indirect tax on their business too!

Even though other taxes made directly in a state might be less, the customer factors in the sales tax when they make purchasing decision. Not having sales tax SHOULD help many businesses in this state, especially competing against other online business that don't charge for shipping costs.

[HuckleB]

27. Well, any business near the border is getting cross-border business because of that.

[earth mom]

8. Sorry but most "representatives" are too busy worrying about themselves

to make the "tough budget decisions".

I LOVE the Oregon vote because it is THE WILL OF THE PEOPLE.

Not some fucking bought off self absorbed greedy politician!

[sandnsea]

15. No, the Dem legislature passed this first

Then the Repugs put it in a special referendum, which the people rejected. But this definitely started with a very tough vote in the legislature and it should have stayed that way.

[cascadiance]

17. Hopefully this vote will strengthen the decent Dem's hands in the legislature!

Which took the chance to initially put this in to law. Also glad that it was they who acted first, so that this is retroactive to last year.

That means those of us unemployed will be getting a tax BREAK on this year's taxes. Make sure you update your Oregon Turbotax software a few times to get the unemployment tax benefit tax exemption before you pay your taxes this year!

[sandnsea]

18. Thanks for the reminder

My son has unemployment benefits, A LOT of them, from 2009. He'll be glad to hear about this. It's not been something we even talked about in making the vote.

[Winterblues]

10. This guy doesn't take into account that Oregon votes by mail

Voters had over two weeks to go over the ballot from their kitchen table and discuss it with friends and relatives. It is not a spur of the moment vote as this article would like to suggest..It is/was a studied vote cast by Oregonians with a very good turnout...

[Blue_Tires]

20. k+r

[jobendorfer]

22. I think Thompson's mistaking pragmatism for anger

When 80% of the wealth and 80% of the income are in the hands of 1% of the population,
you can tax the poor and middle class until the cows come home ... it's not going to help the state raise revenue.
Especially when 1 in 5 adults aren't working.

We *slightly* raised taxes on the wealthy and on corporations for the same reason that Dillinger robbed banks.

It's where the money is.

It's purely a practical matter.

So: if you're wealthy, and you don't like paying Oregon income tax, find a way to write it off.
Like, by HIRING SOMEBODY, maybe.

This, in essence, was FDR's solution to the depression. He told the wealthy, invest in something that gets
people working, or we'll tax your wealth away from you.

J.

[JackRiddler]

26. "Imagine you're an Oregon lawmaker on the day of the *corporate* tax bill vote..."

You wake up, go downstairs and flip through your *campaign accounts book* while the nanny brews the coffee. Will you be able to outspend your wealthy opponent on campaign advertising in the next month? The nanny wakes up your kids and drives them to their fine, but admittedly insular private school. Your driver pulls you on to the highway to head to work. The engine light turns on and it's good you don't have to worry about that. You reach the office, toil through phone calls from lobbyists for three hours (they all want your NO vote on the corporate tax bill and most of them have contributed to your campaign before and have been invited to next week's fundraiser). At noon you send a staffer to a Subway to buy sandwiches for the staff because that would be a fun change for a day. You remember that there's a deep budget deficit and that something will have to be done in a distant place called tomorrow. But tomorrow is tomorrow, and there will always be a chance to RAISE SALES TAXES ON THE PLEBES. You need that campaign money today. So you vote NO to all the corporate tax increases and YES to corporate welfare -- as you always have and almost always will.

So this author defines the failure of democracy as taxing the rich, eh? Fuck him.